An unpaid seller's right to reclaim goods is available only if

• A. The seller makes a general demand within 60 days.
• B. The buyer is insolvent at delivery and misrepresented solvency in writing within 3 months before delivery.
• C. The buyer is insolvent when it received the goods and the seller demands within 10 days after receipt; or the buyer misrepresented solvency in writing within 3 months before delivery.
• D. There is no insolvency requirement.

Answer: (C)

An unpaid seller can reclaim goods only under two specific circumstances. First, if the buyer is insolvent at the time the goods are received, the seller must demand return within 10 days after receipt. This tight window keeps credit risk in check and prevents the buyer from holding onto goods while insolvent. Second, if the buyer had misrepresented solvency in writing within the 3 months immediately before delivery, the seller may reclaim on that basis. These conditions balance protecting the seller from bad credit and not penalizing buyers who were honestly solvent at the time.

That’s why the best answer combines both scenarios: reclaiming when insolvency exists at receipt with a 10-day demand, or reclaiming if there was a misrepresentation of solvency in writing within the 3 months before delivery. General demands without insolvency or the absence of the misrepresentation window aren’t enough, and there is a valid insolvency-based requirement that must be met.